Last year, tenants filed lawsuits against a group of real estate developers and property management firms, including several in the San Francisco Bay Area, alleging that the firms colluded to drive up rents by sharing information using pricing software developed by Texas-based RealPage.

Now the Justice Department is getting involved. On Friday, the Biden administration, together with the attorneys general of California and seven other states, filed an antitrust lawsuit against RealPage. They accused the company of reducing competition among landlords and taking over the market for such algorithm-based rental software. It is one of the first major antitrust lawsuits directed against a company in the rental housing industry.

“Americans should not have to pay more rent just because a company found a new way to work with landlords and break the law,” U.S. Attorney General Merrick Garland said in a statement.

RealPage defends its business and denies that it hampers competition. In a statement posted on its website in June, the company said landlords using the software “always have 100% discretion to accept or reject any pricing recommendations made by the software.” It blames low housing production and other market factors for the higher rental prices. RealPage did not immediately respond to a request for comment from this news organization.

The Justice Department also included statements from landlords describing the software’s anti-competitive practices in its complaint.

“I always liked this product because your algorithm uses proprietary data from other subscribers to suggest rents and terms,” ​​an unnamed landlord says in the complaint. “This is classic price fixing.”

RealPage came into the public eye in 2022 when investigative news outlet ProPublica published an investigation into how RealPage helped landlords set rent prices for apartments across the country. What followed was a flood of lawsuits—more than 20 from renters across the country—against RealPage.

The lawsuits also named several large multifamily property owners who allegedly used RealPage to negotiate rental rates and stagger the renewal dates of their leases to avoid an oversupply of rental properties.

The developers mentioned include major Bay Area developers such as Greystar, Sares Regis, AvalonBay Communities, Prometheus Real Estate Group and the Related Companies.

The consolidated complaint alleges that property managers who use revenue management software are responsible for approximately 70% of all multifamily properties in the San Francisco area and 66% of all multifamily properties in the San Jose submarket.

The lawsuit also accused nearly 50 other industry associations — including the East Bay Rental Housing Association, the Berkeley Property Owners Association, the Professional Property Management Association of San Francisco and the San Francisco Apartment Association — of acting as “cartel facilitators” by providing RealPage and its property owners with a platform for conspiracies.

In a statement, Krista Gulbransen, executive director of the Berkeley Property Owners Association, said her organization has no and never has had any relationship or affiliation with RealPage or any of its subsidiaries. The East Bay Rental Housing Association declined to comment on the ongoing litigation, and the other associations did not immediately respond to requests for comment.

The federal lawsuit was welcomed by tenants’ rights groups, including here in the Bay Area.

“We have long known that corporate landlords play a significant role in driving up housing costs and creating our housing crisis,” said Merika Goolsby, board member of the Alliance of Californians for Community Empowerment. “We are grateful to the Department of Justice for taking the necessary steps to curb the corporates’ blatant greed and hold wrongdoers like Real Page accountable.”